Oooh, that article is a pretty big bombshell (everyone should read it, just because a lot of people will take it seriously). He brings up some interesting points about a shorting attack, but I don't think his argument properly accounts for how Bitcoin will grow as the threat grows. (A common mistake among Bitcoin critics.) See for example:

One of Gavin's proposals on how to mitigate the threat of a 51% attack: http://gavintech.blogspot.jp/2012/05/neutralizing-51-attack.html But this only mitigates the denial-of-service aspect, not the double-spending aspect that the Clearmatics article refers to. Still it seems like if it's for settlement you can just wait a very long time, like 60 confirmations, or 10 hours, or even something like 3 days as it takes now for securities, but save on all the expenses. What are the odds that a 51% goes undetected for that long? It would totally screw up the ledger even if it were detected and legally rolled back, sure, but the premise is that the motivation of the attacker is to double-spend the security, not just to watch Bitcoin burn.

The whole reason for mining pools is because miners care about variance. But consumers don't, since they don't even know/care the device is hashing. So have each device be a mining node* (not just a hashing machine) but set up so that, in the event that it wins the block reward lottery, the reward all goes to the manufacturer. Either by some automatic hardcoding or by a contractual agreement. (Alternatively, the reward could be split 75/25 or some other way, if consumers are interested in "playing the lottery," though I'm not sure that would be much fun compared to buying a lottery ticket, because the results take years to come in.)

To manufacturers that are big enough or can afford to wait out the variance, it won't matter much.

The only catch is that each machine doesn't have a replenishing supply of satoshis to use for IoT. Still, preload them with a bit or just send satoshis to them from the manufacturer on a monthly basis - the hard problem of them having a Bitcoin wallet to receive them is already solved anyway.

*Or if a node can't be fit on a phone, have some larger home appliance be the node, everything else just hashes.

As a guy that's been mining for a few years now, I can get behind the idea of mining space heaters. I even wanted to place a small mining farm in the furnace room and then control the vents with individual thermostats to distribute the heat, dumping excess heat as needed.

But mining on a phone, it's just not reasonable. You could put the same chip on a USB stick and it would perform better.

Serious mining makes for some serious heat. If I'm 21 the household heating market is where I would target.

As a guy that's been mining for a few years now, I can get behind the idea of mining space heaters. I even wanted to place a small mining farm in the furnace room and then control the vents with individual thermostats to distribute the heat, dumping excess heat as needed.

But mining on a phone, it's just not reasonable. You could put the same chip on a USB stick and it would perform better.

Serious mining makes for some serious heat. If I'm 21 the household heating market is where I would target.

sure, they will go after those mkts too. but, imo, smartphones is the Big Kahuna. that is where the greatest money to be had lies.

remember, those OEM's that understand Bitcoin want to grab the majority of mkt share in developing nations by offering severe discounts to new previously unbanked customers. get the phone into their hands, lock them in, and worry about significant monetization later. the only way to do this, in the 21 model of mining chips, is to make the smartphones hash as a payback. whether mining "on it's own" will be profitable or not, it's hard to tell. but it could be with enough efficiency in the chip, assuming customers will attempt to pass on charging costs to "others", and coordinating the hashing power to generate blocks. either way, i don't think that's the main thrust. they want to get Satoshi's onto ppl's phones so as to allow the phones to "negotiate" micropayments for all sorts of unimaginable things like parking, fast lanes on hwys, who knows. the OEM's will have one huge coordinated network to which they can sell all sorts of other products and services as well. it's also their stated objective to decentralize mining which i think is a worthy goal even if it means they lose money on it. i've seeing all sorts of crying about "centralization" as a result. that's ridiculous. who honestly thinks that bringing on millions, if not billions, of new individual miners into the economy will do that? do you honestly think the #pools we have now will stay constant and just absorb all this new value? no way. as many new pools will crop up as device manufacturers who are willing to do this. in fact, each OEM should set up their own pool if they want to maximize the gain. it's easy. i ran my own sort of pool back when i was pointing 15 or so of my own miners at my stratum solo mining server. and i'm not a geek or CS. it was relatively easy. all sorts of new pool operators are going to come out of the woodwork to take any outsourcing that might occur. why not? free money in fees for easy work. no, we are going to see a mushrooming of the absolute #pools as well as a spreading out of the distribution into a much more decentralized piechart than we've already seen.

there will be also many ppl here in developed nations who will want these mining phones. esp with all the free electricity we have access to.

if you haven't listened to the audio dropt posted above, you should. it highlights and expands on many of the things i have been saying about this.

sure, they will go after those mkts too. but, imo, smartphones is the Big Kahuna. that is where the greatest money to be had lies.

remember, those OEM's that understand Bitcoin want to grab the majority of mkt share in developing nations by offering severe discounts to new previously unbanked customers. get the phone into their hands, lock them in, and worry about significant monetization later. the only way to do this, in the 21 model of mining chips, is to make the smartphones hash as a payback. whether mining "on it's own" will be profitable or not, it's hard to tell. but it could be with enough efficiency in the chip, assuming customers will attempt to pass on charging costs to "others", and coordinating the hashing power to generate blocks. either way, i don't think that's the main thrust. they want to get Satoshi's onto ppl's phones so as to allow the phones to "negotiate" micropayments for all sorts of unimaginable things like parking, fast lanes on hwys, who knows. the OEM's will have one huge coordinated network to which they can sell all sorts of other products and services as well. it's also their stated objective to decentralize mining which i think is a worthy goal even if it means they lose money on it. i've seeing all sorts of crying about "centralization" as a result. that's ridiculous. who honestly thinks that bringing on millions, if not billions, of new individual miners into the economy will do that? do you honestly think the #pools we have now will stay constant and just absorb all this new value? no way. as many new pools will crop up as device manufacturers who are willing to do this. in fact, each OEM should set up their own pool if they want to maximize the gain. it's easy. i ran my own sort of pool back when i was pointing 15 or so of my own miners at my stratum solo mining server. and i'm not a geek or CS. it was relatively easy. all sorts of new pool operators are going to come out of the woodwork to take any outsourcing that might occur. why not? free money in fees for easy work. no, we are going to see a mushrooming of the absolute #pools as well as a spreading out of the distribution into a much more decentralized piechart than we've already seen.

there will be also many ppl here in developed nations who will want these mining phones. esp with all the free electricity we have access to.

if you haven't listened to the audio dropt posted above, you should. it highlights and expands on many of the things i have been saying about this.

What are you smoking? You forget what proof of work IS. It's proof of burn of electricity. You cannot earn more in the long term, than the value of the electricity you burned. How much electricity can a smartphone burn?

Charging a smartphone costs a whopping 41 cents PER YEAR. Nobody gives a shit about those pennies, and even less about 25% of those pennies. Not even the poorest people in Africa, with free power and 10 smartphones, can earn anything close to a worthwhile return.

And that's assuming they have free power! Maybe shop owners NOW don't mind if people charge their phones, but what happens when their shop is filled with freeloaders who will just steal power and not buy anything? Of course they're going to cut off the free power.

sure, they will go after those mkts too. but, imo, smartphones is the Big Kahuna. that is where the greatest money to be had lies.

remember, those OEM's that understand Bitcoin want to grab the majority of mkt share in developing nations by offering severe discounts to new previously unbanked customers. get the phone into their hands, lock them in, and worry about significant monetization later. the only way to do this, in the 21 model of mining chips, is to make the smartphones hash as a payback. whether mining "on it's own" will be profitable or not, it's hard to tell. but it could be with enough efficiency in the chip, assuming customers will attempt to pass on charging costs to "others", and coordinating the hashing power to generate blocks. either way, i don't think that's the main thrust. they want to get Satoshi's onto ppl's phones so as to allow the phones to "negotiate" micropayments for all sorts of unimaginable things like parking, fast lanes on hwys, who knows. the OEM's will have one huge coordinated network to which they can sell all sorts of other products and services as well. it's also their stated objective to decentralize mining which i think is a worthy goal even if it means they lose money on it. i've seeing all sorts of crying about "centralization" as a result. that's ridiculous. who honestly thinks that bringing on millions, if not billions, of new individual miners into the economy will do that? do you honestly think the #pools we have now will stay constant and just absorb all this new value? no way. as many new pools will crop up as device manufacturers who are willing to do this. in fact, each OEM should set up their own pool if they want to maximize the gain. it's easy. i ran my own sort of pool back when i was pointing 15 or so of my own miners at my stratum solo mining server. and i'm not a geek or CS. it was relatively easy. all sorts of new pool operators are going to come out of the woodwork to take any outsourcing that might occur. why not? free money in fees for easy work. no, we are going to see a mushrooming of the absolute #pools as well as a spreading out of the distribution into a much more decentralized piechart than we've already seen.

there will be also many ppl here in developed nations who will want these mining phones. esp with all the free electricity we have access to.

if you haven't listened to the audio dropt posted above, you should. it highlights and expands on many of the things i have been saying about this.

What are you smoking? You forget what proof of work IS. It's proof of burn of electricity. You cannot earn more in the long term, than the value of the electricity you burned. How much electricity can a smartphone burn?

Charging a smartphone costs a whopping 41 cents PER YEAR. Nobody gives a shit about those pennies, and even less about 25% of those pennies. Not even the poorest people in Africa, with free power and 10 smartphones, can earn anything close to a worthwhile return.

And that's assuming they have free power! Maybe shop owners NOW don't mind if people charge their phones, but what happens when their shop is filled with freeloaders who will just steal power and not buy anything? Of course they're going to cut off the free power.

I really can't believe people are falling for this bullshit.

you sound angry. what are you, a Monero holder or something? thinking you're smarter than the wealth of talented minds in the 21 camp is what i'd consider "smoking". did you read anything i said above? it could, in fact, be a loss leader. but getting a majority share of a known burgeoning market that will leapfrog the pc and laptop mkt is hugely valuable. otoh, if they indeed have worked out the power reqs, which is what i think they mean when they referred to power scaling per device, then it will be an even bigger win. you can't discount this from a group that includes major industry leaders like Qualcomm & Cisco. furthermore, advancing the goal of mining decentralization stands to kill a major bear tard argument against Bitcoin in the long run. it's a worthy goal. and as far as the mkt responding to "stealing" electricity. unfortunately for you anti-Bitcoin beartards, the mkt will be slow to respond, as in years. it always is. what we're talking about is empowering millions of disadvantaged, yet ambitious, smart individuals who want to make money like you and me. the whole concept leverages on Bitcoin's Sound Money principles which makes it worthwhile to do whatever it takes to make it work. you can't stop that and i think 21 understands this principle. stop your whining.

As a guy that's been mining for a few years now, I can get behind the idea of mining space heaters. I even wanted to place a small mining farm in the furnace room and then control the vents with individual thermostats to distribute the heat, dumping excess heat as needed.

But mining on a phone, it's just not reasonable. You could put the same chip on a USB stick and it would perform better.

Serious mining makes for some serious heat. If I'm 21 the household heating market is where I would target.

As a guy that's been mining for a few years now, I can get behind the idea of mining space heaters. I even wanted to place a small mining farm in the furnace room and then control the vents with individual thermostats to distribute the heat, dumping excess heat as needed.

But mining on a phone, it's just not reasonable. You could put the same chip on a USB stick and it would perform better.

Serious mining makes for some serious heat. If I'm 21 the household heating market is where I would target.

It could be a good business plan, or a mistake, or a con. You're excluding the middle.

I hate selective quoting. The con part, that is viable only on a small scale.

Okay, I didn't follow it. What's the con?

I was too quick, your comments were ok, I deleted my post, but too late.

Somebody suggest that people would buy these phones for extra, use extra power, not knowing they earned money for the company only. That a con.

Ok, I'll try again... why put that chip in the phone if you could just include it in the charger cable? Or charging pad for wireless charging?

Battery life, size, weight, efficiency are all competing qualities for phones and putting a bitcoin miner in your phone is not going to make it more competitive.

(Secure enclave type wallet on the other hand = no brainer)

i don't know. maybe for tracking purposes as hashing shares back to the pool requires a continuous connection? which admittedly isn't great for privacy but might enable the pool certain functionality. but that connection might be what's needed for this continuous negotiating interaction btwn phones not necessarily involving the phone owner that was talked about in the audio.

As a guy that's been mining for a few years now, I can get behind the idea of mining space heaters. I even wanted to place a small mining farm in the furnace room and then control the vents with individual thermostats to distribute the heat, dumping excess heat as needed.

But mining on a phone, it's just not reasonable. You could put the same chip on a USB stick and it would perform better.

Serious mining makes for some serious heat. If I'm 21 the household heating market is where I would target.

As a guy that's been mining for a few years now, I can get behind the idea of mining space heaters. I even wanted to place a small mining farm in the furnace room and then control the vents with individual thermostats to distribute the heat, dumping excess heat as needed.

But mining on a phone, it's just not reasonable. You could put the same chip on a USB stick and it would perform better.

Serious mining makes for some serious heat. If I'm 21 the household heating market is where I would target.

listen to that. its not about making profit. remove the idea of making profit from these chips from your head.

time to dump NXT and buy Bitcoin?

Nxt doesn't require power sucking chips installed into every device imaginable to operate:) I will stand by the idea that it is wise to hold both as each system will feed off each others strengths for different purposes.

As a guy that's been mining for a few years now, I can get behind the idea of mining space heaters. I even wanted to place a small mining farm in the furnace room and then control the vents with individual thermostats to distribute the heat, dumping excess heat as needed.

But mining on a phone, it's just not reasonable. You could put the same chip on a USB stick and it would perform better.

Serious mining makes for some serious heat. If I'm 21 the household heating market is where I would target.

listen to that. its not about making profit. remove the idea of making profit from these chips from your head.

time to dump NXT and buy Bitcoin?

Nxt doesn't require power sucking chips installed into every device imaginable to operate:) I will stand by the idea that it is wise to hold both as each system will feed off each others strengths for different purposes.